Fortune 500 companies using social media to reach customers

Laura Watkins, marketing coordinator for Chicago's Green City Market, posts on social media sites up to five times a day. Photo: Erik Unger

Last year, United Airlines found a new way to use Twitter to reward customers and fill empty seats. In May, the Chicago-based airline began offering a limited number of Twitter-exclusive fare deals, or “twares,” to domestic and international destinations. The last-minute specials are sent out once or twice a week and typically expire within one or two hours. Most sell out in seconds, a United spokeswoman says.

“We want to give our followers something special that no one else can get,” she says, while allowing the airline to fill seats that might otherwise go unoccupied.

Harnessing social media tools to boost sales, connect with customers and increase brand recognition has become standard operating procedure in Corporate America. More than 60% of Fortune 1,000 companies with a Web site will connect to or host some form of online community to build customer relationships, according to Gartner Inc., a Connecticut-based information technology research company. The flip side is that more than 50% will fail, Gartner says, ultimately eroding customer and company values.

The numbers among small businesses are more dire. A recent survey conducted by New York-based GfK Roper Consulting Group found that 76% of small-business owners say social networking sites such as Facebook, Twitter and LinkedIn are not helpful in generating business leads or expanding their operations. Eighty-six percent say they have not used social networking sites to get business advice or information.

That, experts say, is a mistake, because even for those consumer-oriented businesses well-versed in social media, the effort can be surprisingly effective, bringing in unexpected demographics and customer loyalty.

Northfield-based Kraft Foods Inc. launched its iFood Assistant application for iPhone and iPod touch users in November 2008 to help consumers locate Kraft products and prepare meals using them. One year later, the company reports that 22% of iFood Assistant users are men, higher than its traditionally female-heavy demographic, and 99% are first-time users of a Kraft Web site or Web-based tool.

In addition, six months after their initial download, more than 60% of users are still engaged with the application, according to the company. In comparison, some industry experts say that typically less than 5% of users are still involved with a downloadable app after two months. And while they won’t release the number of iFood Assistant users, Ed Kaczmarek, Kraft’s director of innovation and consumer experiences, says the company hit its three-year projection within the first month of introduction.

“We hit the sweet spot of finding what utility you can provide your consumers and what they consider to be of high value,” Mr. Kaczmarek says.

To be sure, legal, privacy and other constraints mean some business segments — financial services and health care among them — may not readily lend themselves to the practice. But even there, social media tools can play a key role in building customer relationships, says Elizabeth Neumaier, creative director at White Gazelle, a Chicago marketing and advertising consultancy.
“Companies can use online tools to create feedback loops and get ideas to improve products or services from customers who are using your brand,” she says.

Business owner Jim Schreiber is among those not impressed. He started Shui Tea Co. in September to import and sell 18 types of blended, loose-leaf and pressed tea online. He’s been promoting the Lisle-based company on Twitter and Facebook since its launch, with little success. Using Google Analytics to monitor traffic, he found that people coming to his Web site from Twitter and Facebook spent on average only eight seconds on the site. “That’s useless to me,” Mr. Schreiber, 24, says.

While he’s not closing his Twitter account, “I know personal interaction works,” he says, so “why not spend my time on that?”

Online marketers say that businesses that haven’t hit social media pay dirt may have jumped in without a clear idea of what they’re trying to achieve. Others may not give their campaigns enough time to catch on with customers, partners or prospects. That’s a mistake: Unless you’re a household brand, they say, developing relationships, especially online, takes time.

“You need at least six to 12 months to get people following and participating in a dialogue about your company or your products or services,” says Joel Warady, principal of Joel Warady Group, an Evanston marketing consulting firm. “But once they do, they will tell you everything,” he says.

Here are some other ways to connect:

Start with a plan. Determine your goals and objectives and what role social media will play in an overall marketing campaign. Then find ways to share content and bring communities together. Market and promote your company’s blog, Twitter contacts, fan pages, YouTube channels and any other media to targeted prospects and clients. “It should be strategic vs. ad-hoc,” says Ross Kimbarovsky, co-founder of crowdSpring LLC, a Chicago-based online marketplace for creative services, and a social media blogger.

Identify which social media sites your customers are using. Search for your brand name, your competitors’ names, key words or industry. On Twitter, tools such as Advanced Search, Twitter Grader and Twellow can help you find people who may be interested in what you have to say. Join Facebook, Flickr or LinkedIn groups relevant to your business and become part of the conversation.

Register your brand name on as many social media sites as possible, whether or not you plan to use them, and use the same name on each. Web sites such as KnowEm.com and UsernameCheck.com will check availability on a large listing of social media sites at no charge.

Instead, commit to one or two social-media sites and work on creating regular content. Readers, viewers and search engines will better recognize your expertise if you’re consistent. And you can very quickly overextend your capacity by being in too many places and not doing it effectively. “The goal is not to be a technology innovator,” says Mr. Sernovitz, author of “Word of Mouth Marketing: How Smart Companies Get People Talking.” “It’s good old-fashioned target marketing. Find your customers and jump in with them.”

Determine what you’ll say and who will be in charge of saying it, including responding to positive and negative comments. Guidelines should spell out what kind of information employees can and can’t share. Make sure you are in compliance with Federal Trade Commission rules that went into effect Dec. 1 and cover testimonials, bloggers and endorsements. (Go to ftc.gov/opa/2009 for more information.)

Generate compelling content. Based on user feedback, the Art Institute of Chicago found its social media followers enjoyed watching behind-the-scenes videos of the new Modern Wing as it was built and of recent exhibitions as they were installed. In November, the museum announced that it was posting its last podcast to shift its focus to video. “Our sense was that the long-lead format of the podcast was not taking advantage of the technology that’s out there,” says Erin Hogan, the museum’s director of public affairs and communications. “We want to focus on shorter pieces and post more of them to places such as ArtBabble, YouTube and Facebook,” she says. “People really want that insider’s view.”

Post regularly and frequently, says Laura Watkins, marketing and communications coordinator for Chicago’s Green City Market, a non-profit supporting and promoting local, sustainable agricultural practices. But avoid empty automated tweets or computer-generated messages, even if they seem more efficient. Ms. Watkins says she posts on social media sites including Facebook up to five times a week and often sends Twitter posts five times a day, focusing on topics that appeal to her followers such as trends in sustainable farming or preparing holiday meals with locally grown food. As a result, 15% of visits to the market’s Web page come directly from social media outreach. “You’re not creating a conversation if you’re staying silent,” she says.

Hold the sales pitch. The goal is to foster conversation, not push products. “It’s not that people don’t want to buy; people don’t want to be sold,” says Kevin Masi, principal at Torque Ltd., a marketing, design and advertising agency in Chicago.

Recognize that social media has changed the nature of customer communication. “The dialogue sometimes is critical and you have to be prepared for that,” says Jim Andrews, senior vice-president and editorial director at IEG LLC, a corporate sponsorship and consulting firm based in Chicago. “But if you’re going to play this game, that’s part of it.”

Very noteworthy article. Facebook has been an interesting way of communicating with fans. When you post a comment you get to see if interest has been achieved by the fan(s) clicking the Like button. Key indicator for acknowleding that interesting content has been read.

It’s a bit surprising fortune 500 companies would really want to advertise on social sites, it would make more sense to go after a target market. I know some of the top players are targeting mobile phones and getting more than 8% CTR.

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